3 Reasons Borrowers Say No

As a former loan officer and lending executive I have had the opportunity to train thousands of loan officers and production teams in the mortgage industry.  What I learned was that there are three primary reasons a borrower says no.  When loan officers learn to overcome these objections, they can close significantly more loans.

Here are three reasons why borrowers say no. The assumption is that you can save them money or help them. They need a loan. There’s a reason that it makes sense for them to get a loan.

Here are the 3 reasons:

1.         “I don’t know you; I don’t trust you.”

2.         “I don’t understand the benefit. I don’t understand how it’s saving me money, or I don’t understand the benefit of working with you.”

3.         “I think I can get a better deal elsewhere.”

 As a loan officer, you must learn ways to overcome these objections. It starts with understanding the reason why they are saying no. Then once you know why they’re saying no, there are ways to combat that.

Think about why they’re saying no when talking to them because you can combat each one differently. You don’t try to build trust by saying you’re the cheapest. Right? You build trust by explaining the benefit and features of the loan and who you are as a company.

How do you build trust? By explaining the loan program, explaining the process. And quite honestly, its number two is by explaining the benefit. What I’ve found the thing you can concentrate the most on, and spend your most energy on, is the benefit of doing a loan with you.

So back in the day, when rates were lower and there were cash-out transactions, the benefit would be explaining how saving $400 a month means $4,800 a year, which means $25,000 in the next five years. Or you can pay off your loan. You get the math. Explain to them how you’re saving them money.

Today, the rates are different. So what is it? Explain the benefit of a 15-year versus a 30-year. Or the benefit of why they should work with you. It could be, “You can work with me; we close loans here in less than 30 days. We have a 30-day guarantee.” Or it could be, “You can call me anytime you need to.” Or you give them excellent service because there is a benefit to working for you. You have excellent service and great rates; you’re always available. That’s the benefit. So go into the benefit of how you can help them and how you’ve helped others. And you know what happens? Not only do they now understand the benefit, but they also start to trust you.

We’re all right with the final series on three reasons people say no. Again, number one, I don’t know you, and I don’t trust you. Number two, I need help understanding the benefit.

Lastly, I can get a better deal elsewhere. Let’s talk about it; you can do a couple of things. “Hey, just so you know, you can go ahead and move forward with me today, and there’s no cost or obligation. If you get a better deal elsewhere, you can cancel this loan and go to someone else anytime.”

Start them in the transaction. Let them feel like they don’t have to figure it out. And most people, once they start working with you, don’t want to go elsewhere because they don’t want to go through the process again.

The other thing is always going back to number two, explain the benefit. Why a 30-year versus a 15? Why one point versus not? Explain why working with you is essential. Explain the advantages and guess what happens. “I may be able to save a couple of hundred bucks down the street, but this is the service I want.”

People will pay for the service. So if you give good service, people are willing to pay you, but to get paid well, you have to provide them with that service and explain the benefit; they’ll trust you, and then they don’t care about getting a better deal elsewhere because they know that you have their best interest in mind. Go out there and have a great day of selling.